WEBVTT - Paris Looks to the Future of AI, DOGE Sniffs Out Treasury 'Irregularities' 0:00:02.520 --> 0:00:09.760 Bloomberg Audio Studios, podcasts, radio news from the heart of 0:00:09.840 --> 0:00:15.560 where innovation, money and power collide in Silicon Valley and beyond. 0:00:16.000 --> 0:00:30.280 This is Bloomberg Technology with Caroline Hyde and Ed Ludlow. 0:00:34.479 --> 0:00:37.200 Like from New York, I'm Caroline Hyde and I'm Jackie 0:00:37.200 --> 0:00:40.639 Devalas in San Francisco. This is Bloomberg Technology coming up. 0:00:40.840 --> 0:00:44.200 Government and tech leaders descend on Paris for the AI Summit, 0:00:44.479 --> 0:00:48.200 as French President Macron touts the country's very own stargates. 0:00:48.520 --> 0:00:51.640 Plus President Trump says Elon Musk's doge may have found 0:00:51.760 --> 0:00:56.560 quote irregularities at the Treasury Department, and China's BYD is 0:00:56.560 --> 0:00:59.560 putting driver assistance features into most of its cause for 0:00:59.640 --> 0:01:02.360 free and plans to integrate software from Deep Seat. 0:01:02.400 --> 0:01:03.480 But first as. 0:01:03.440 --> 0:01:06.400 Checking on the markets, and actually the Nasdaq pushes higher, 0:01:06.440 --> 0:01:08.240 but Tesla is one of the points. 0:01:08.000 --> 0:01:09.120 Contributed to the downside. 0:01:09.120 --> 0:01:12.120 We'll dig into what buyd means for Tesla competition in China. 0:01:12.280 --> 0:01:15.000 We're up one point three percent, and video lending its 0:01:15.040 --> 0:01:17.520 power to the points that move to the higher side. 0:01:17.600 --> 0:01:19.920 We'll dig into the AI track that drives in Vidia higher. 0:01:19.920 --> 0:01:22.160 But move on to a keystock. You've got to watch 0:01:22.360 --> 0:01:25.399 because as a record high and is up sixteen percent 0:01:25.800 --> 0:01:27.400 for sixteen straight days. 0:01:27.520 --> 0:01:29.320 If we see Meta managed. 0:01:29.000 --> 0:01:31.800 To hold onto these rather small gains on today, Jackie, 0:01:31.959 --> 0:01:34.800 it would be sixteen straight days of gains and a 0:01:34.840 --> 0:01:37.839 lot of it is fueled by AI exuberance. For Meta 0:01:38.120 --> 0:01:40.559 Sweet sixteen, we move on to what's happening over in Paris, 0:01:40.560 --> 0:01:43.240 where it's all about AI. Of course, the summit is 0:01:43.280 --> 0:01:47.320 now underway, bringing together almost one hundred countries and over 0:01:47.360 --> 0:01:51.800 one thousand private sector and civil society representatives, including Prime 0:01:51.800 --> 0:01:54.280 Minister of India. We've also got some outment of open 0:01:54.320 --> 0:01:56.920 AI and this as France is said to announce a 0:01:56.960 --> 0:01:59.760 total of one hundred and thirteen billion dollars in investments 0:01:59.840 --> 0:02:03.480 in AI projects in the country. Bloomleg's Tom McKenzie is 0:02:03.480 --> 0:02:06.320 standing by and rather a kin to stargate here in 0:02:06.320 --> 0:02:10.200 the United States. It's about private sector commitments over in France, 0:02:10.240 --> 0:02:14.240 Tom it is. 0:02:14.280 --> 0:02:16.200 And if the fire had not been lit under the 0:02:16.200 --> 0:02:19.240 feet of policymakers in Europe prior to Deep Seek, prior 0:02:19.280 --> 0:02:22.680 to Stargate, then it certainly has been in recent weeks. 0:02:22.720 --> 0:02:25.720 And this is Macwan's response. The President expects to take 0:02:25.720 --> 0:02:28.359 the stage behind me shortly. Currently you've got Cinder Butcher, 0:02:28.440 --> 0:02:31.840 the CEO of course of Alphabet speaking. The commitment from Macaran, 0:02:31.919 --> 0:02:33.880 as you say, around one hundred and nine billion euros 0:02:33.919 --> 0:02:37.440 one hundred and thirteen billion US dollars, is in part 0:02:37.600 --> 0:02:40.280 an answer to stargate. It is also in part an 0:02:40.280 --> 0:02:43.120 answer to the innovation now coming out of China, and 0:02:43.160 --> 0:02:46.919 it's an attempt by France and Europe to position itself 0:02:46.919 --> 0:02:49.280 to close the gap. Macwen's been quite clear about this. 0:02:49.280 --> 0:02:51.639 This is catch up now for Europe. And here's line 0:02:51.720 --> 0:02:53.960 yesterday in an interview of a French newspaper saying we 0:02:54.000 --> 0:02:57.200 need to invest, invest, invest, along without one hundred and 0:02:57.200 --> 0:02:58.799 thirteen billion US dollars. By the way, you also have 0:02:58.919 --> 0:03:02.200 general catalyst plans for about one hundred and fifty billion 0:03:02.400 --> 0:03:05.480 used audiers. They say they could put to play in France, 0:03:05.600 --> 0:03:09.120 in Europe alongside the likes of Mistral and Spotify and 0:03:09.160 --> 0:03:13.240 other investors to drive and build out infrastructure to layer 0:03:13.320 --> 0:03:16.560 as well on top of the industrial sector of Europe. 0:03:16.600 --> 0:03:18.720 That's where they think the opportunity is. But of course, 0:03:18.800 --> 0:03:22.519 key questions around implementation, key questions about regulation, key questions 0:03:22.520 --> 0:03:26.200 about whether or not we have the data the chips 0:03:26.280 --> 0:03:29.080 and the talents to really compete versus the US and China. 0:03:30.000 --> 0:03:33.920 Tom, this is a huge ambitious effort on behalf of 0:03:33.919 --> 0:03:37.480 the Europeans. But I'm curious because they've usually also been 0:03:37.560 --> 0:03:39.920 those to be at the forefront of regulation, something that 0:03:40.040 --> 0:03:44.160 private companies and some investors don't really love. Have you 0:03:44.280 --> 0:03:47.640 gotten any sense from the executives you've spoken to about 0:03:47.640 --> 0:03:49.520 how that balance is playing out right now? 0:03:49.520 --> 0:03:55.560 There that is very much a live debate to what 0:03:55.760 --> 0:03:59.080 extent Europe should regulate when it comes to AI. The 0:03:59.080 --> 0:04:01.440 EUAI Act, it is going to start to take hold 0:04:01.480 --> 0:04:05.280 this year. It will be largely fully implemented by twenty 0:04:05.360 --> 0:04:08.480 twenty six, so that is already the door is already open. 0:04:08.520 --> 0:04:10.560 The horse has already bolted on that front. To what 0:04:10.640 --> 0:04:13.240 extent they can tweet the regulation going forward is a 0:04:13.320 --> 0:04:16.719 question mark. But clearly the divide now between Europe's approach 0:04:16.920 --> 0:04:19.360 and the US approach for President Trump ripping up AI 0:04:19.480 --> 0:04:23.760 regulation is stark. Some would say that having the guard 0:04:23.800 --> 0:04:26.760 rails in place in Europe is at least beneficial. At 0:04:26.839 --> 0:04:29.520 least there is the guard rails in place, at least 0:04:29.560 --> 0:04:32.200 there is a track to followed. You do, of course, 0:04:32.240 --> 0:04:35.680 have a disparate landscape in the US state by state 0:04:35.760 --> 0:04:40.760 that potentially could point pose problems for US AI companies 0:04:40.800 --> 0:04:43.840 trying to navigate the state by state regulation. The other question, 0:04:43.880 --> 0:04:46.960 of course, is to what extent Europe can leverage its 0:04:47.000 --> 0:04:48.799 talent that it's got here, and it does have software 0:04:48.800 --> 0:04:51.440 engineering talent the energy as well. France is a big 0:04:51.480 --> 0:04:53.719 producer of nuclear energy. That's a benefit. We do not 0:04:53.800 --> 0:04:56.640 have semiconductors, we do not have companies like Huawei in 0:04:56.720 --> 0:04:59.720 China on video in the US, so that remains a challenge. 0:05:00.120 --> 0:05:02.919 But they're hoping that at the end of this summer 0:05:02.960 --> 0:05:04.880 they come through with a proposal, they can meet some 0:05:04.920 --> 0:05:07.640 of the challenges and really get to grips on the 0:05:07.720 --> 0:05:08.760 implementation of this. 0:05:09.960 --> 0:05:11.600 That's Bloomberg's Tom mackenzie. 0:05:11.640 --> 0:05:12.040 Thank you. 0:05:12.360 --> 0:05:14.560 Here's something that came out of one of Tom's interviews 0:05:14.560 --> 0:05:17.039 at the Paris I Summit earlier today. The head of 0:05:17.080 --> 0:05:20.839 Google's Deep Mind, Demasisabus, questioning the notion that China's Deep 0:05:20.920 --> 0:05:24.440 Seek actually spent less than six million dollars to develop 0:05:24.440 --> 0:05:26.000 its aisystem. 0:05:26.400 --> 0:05:28.440 The first thing to say is it's a very impressive model, 0:05:28.520 --> 0:05:30.600 or very impressive piece of work. I think the team 0:05:31.120 --> 0:05:33.280 is probably the best team that I've seen come out 0:05:33.279 --> 0:05:35.800 of China. So that said, I think a lot of 0:05:35.839 --> 0:05:38.480 the claims are exaggerated and a little bit misleading. 0:05:39.400 --> 0:05:42.840 Let's bring in RBC Capital Markets Internet analyst Brad Ericson 0:05:43.040 --> 0:05:45.440 for more on the AI landscape, on the race, so 0:05:45.600 --> 0:05:48.599 called race between US and China, and Brad, when you 0:05:48.720 --> 0:05:50.800 hear of deep Sea, you know, it seems as though 0:05:50.839 --> 0:05:53.680 people are questioning the overall amount. Therefore, do you like 0:05:53.760 --> 0:05:56.880 Amazon committing to one hundred billion dollars to Microsoft more 0:05:56.880 --> 0:05:59.360 than eighty and similar coming out of Meta for example. 0:06:01.040 --> 0:06:03.600 Yeah, I think for the moment, they have the revenue 0:06:03.600 --> 0:06:06.279 growth to support those investments. I think people are right 0:06:06.360 --> 0:06:10.640 to question the long term return on invested capital equation there, 0:06:10.680 --> 0:06:14.279 which is really where the debate has shifted. But I 0:06:14.279 --> 0:06:17.240 think for the moment, again, we're in this moment where 0:06:17.279 --> 0:06:21.000 we don't know how big this technology can become, and 0:06:21.040 --> 0:06:23.720 so I think we lean on those statements such as 0:06:23.760 --> 0:06:26.080 the risk of underinvestment is far greater than the risk 0:06:26.120 --> 0:06:27.040 of overinvestment. 0:06:27.080 --> 0:06:28.960 I do think that's kind of the prudent way for 0:06:29.000 --> 0:06:31.159 these companies to be treating this for the time being. 0:06:31.600 --> 0:06:34.479 And look, investors have thus far given them a pass. 0:06:34.720 --> 0:06:38.080 Look at Meta shares extraordinary sixteen day run to the 0:06:38.160 --> 0:06:41.000 higher side. Many would say that the open source commitment 0:06:41.040 --> 0:06:43.960 from Meta has been speaking to their large language model operation, 0:06:44.040 --> 0:06:47.360 the commitment to leaning into AI, even as of course 0:06:47.400 --> 0:06:49.400 they're announcing who's going to be hit by the job 0:06:49.440 --> 0:06:51.800 cuts today. Just talk to us about some of the 0:06:51.800 --> 0:06:54.920 thesis around Meta outperforming the other big tech players here. 0:06:56.279 --> 0:06:58.920 Yeah, sixteen game hitting streak is pretty impressive. 0:07:00.320 --> 0:07:02.640 I would say Meta has kind of the two key 0:07:02.760 --> 0:07:05.960 things going for it right now. One, they have arguably 0:07:06.040 --> 0:07:08.640 the greatest amount of revenue coverage. 0:07:08.640 --> 0:07:09.560 It's what we call it. 0:07:09.600 --> 0:07:12.560 So again, just when you look at the marginal revenues 0:07:12.560 --> 0:07:15.120 they're adding, they just did twenty seven billion dollars a 0:07:15.160 --> 0:07:19.080 year over year in twenty twenty four. That's plenty of 0:07:19.640 --> 0:07:23.080 extra revenue dollars to cover the depreciation that's coming into 0:07:23.160 --> 0:07:25.880 the model from the capex spen. So that's the first part. 0:07:26.160 --> 0:07:28.280 The second part is they just have a heck of 0:07:28.320 --> 0:07:31.640 a great narrative on all the ways that AI could 0:07:31.680 --> 0:07:35.480 affect their products, both now and in the future. And 0:07:35.520 --> 0:07:38.480 so I think the market is what the market's telling 0:07:38.520 --> 0:07:41.960 you right now is they really believe in Meta's strategy 0:07:42.080 --> 0:07:44.720 and really AI giving it the most torque. 0:07:44.440 --> 0:07:46.440 To the upside in the future for. 0:07:46.440 --> 0:07:50.160 This model, Brad, I want to talk about open source 0:07:50.200 --> 0:07:52.960 technology now that we're on the topic of Meta, because 0:07:52.960 --> 0:07:56.760 in your note you actually highlight startups desire to want 0:07:56.800 --> 0:08:01.040 to build more N specific applications on top of already 0:08:01.080 --> 0:08:05.520 existing AI and I'm curious how that shift is better 0:08:05.560 --> 0:08:09.920 for investors. Are open source companies better position than closed 0:08:09.920 --> 0:08:11.880 source companies like open AI for example. 0:08:14.240 --> 0:08:15.840 You know, I think there's a debate as to whether 0:08:15.880 --> 0:08:19.040 the closed source guys actually do decide to open things 0:08:19.120 --> 0:08:21.600 up because it could to the improvement of their models 0:08:21.680 --> 0:08:24.480 or the improvement of their distribution over time. 0:08:25.520 --> 0:08:29.360 Clearly, you know Meta's open source strategy. I don't want 0:08:29.360 --> 0:08:31.560 to call it a wolf in sheep's clothing. 0:08:31.240 --> 0:08:35.040 But there is an aspect where they're looking to leverage 0:08:35.080 --> 0:08:38.280 sort of developer intel of the world to be able 0:08:38.320 --> 0:08:41.680 to then potentially pull in those innovations in the model 0:08:41.880 --> 0:08:44.760 and then use them for internal purposes which would never 0:08:44.800 --> 0:08:48.000 see the light of day, and that benefits their products 0:08:48.400 --> 0:08:51.000 longer term. So I do think, you know that's that's 0:08:51.080 --> 0:08:54.080 definitely a part of their strategy and frankly, that's really 0:08:54.120 --> 0:08:57.320 smart from our perspective. So that's that's I think, you know, 0:08:57.840 --> 0:08:59.800 at this point, I think that's how they are leveraging 0:08:59.800 --> 0:09:02.400 open source so well. And again, like I said earlier, 0:09:02.480 --> 0:09:05.240 the market is really buying into that thesis right now. 0:09:06.080 --> 0:09:08.079 One of the other things that we're looking closely at 0:09:08.080 --> 0:09:11.080 today is of course the Paris AI Summit, and we've 0:09:11.120 --> 0:09:13.160 had a few of these summits over the last couple 0:09:13.120 --> 0:09:15.640 of years, ever since child GBT hit the scene. But 0:09:15.679 --> 0:09:19.440 I'm curious as an investor if anything that comes out 0:09:19.440 --> 0:09:22.240 of that really affects your long term thesis, because we 0:09:22.280 --> 0:09:25.200 are talking about big sums of money being poured into 0:09:25.200 --> 0:09:26.640 this space now from the Europeans. 0:09:28.280 --> 0:09:28.520 Yeah. 0:09:28.520 --> 0:09:30.720 Absolutely, It's kind of funny how this is following the 0:09:30.760 --> 0:09:36.080 history of tech right US innovates, China replicates, and Europe regulates. 0:09:36.240 --> 0:09:39.600 Is kind of the famous saying there. Yeah, I mean, 0:09:40.200 --> 0:09:43.360 certainly from a sovereign AI perspective, I think countries recognized 0:09:43.400 --> 0:09:47.240 there's a huge opportunity to modernize and make better use 0:09:47.280 --> 0:09:50.320 of the treasure tropes of data they all have. On 0:09:50.360 --> 0:09:54.600 the flip side, of course, there's a civil society impact here. 0:09:54.679 --> 0:09:56.480 What does it do to jobs? Does it make people 0:09:56.480 --> 0:09:58.480 more productive or does it just straight up take. 0:09:58.520 --> 0:10:03.640 Jobs from and and remove or dislocate industries in an 0:10:03.640 --> 0:10:06.760 adverse way for you know, macroeconomies. 0:10:07.800 --> 0:10:09.520 Those are giant. 0:10:09.160 --> 0:10:12.079 Questions right that are that are certainly being discussed there. 0:10:12.080 --> 0:10:14.640 But I think from this point, you know, our perspective, 0:10:14.760 --> 0:10:16.640 our seat, where we're covering. 0:10:16.320 --> 0:10:18.920 These these Internet names. 0:10:19.360 --> 0:10:22.200 They're making all the investments to push you know, the 0:10:22.280 --> 0:10:25.800 industry and frankly the world forward this with this innovation. 0:10:26.120 --> 0:10:27.640 We have to be behind that at this. 0:10:27.640 --> 0:10:31.680 Point, and you get the infiltration across not only the 0:10:31.760 --> 0:10:34.880 large language model makers but those that adopt general to AI. 0:10:35.000 --> 0:10:37.280 Just think of pinterest numbers last week and how generative 0:10:37.280 --> 0:10:39.320 AI is fed into that story. We get the news 0:10:39.360 --> 0:10:41.439 today from other sources that LIFT is going to be 0:10:41.480 --> 0:10:44.160 eyeing robotaxes as soon as twenty twenty six. Where are 0:10:44.160 --> 0:10:46.600 the level of Internet names that we haven't yet factored in, 0:10:46.640 --> 0:10:49.240 where GENAI is going to really be reaching forward in 0:10:49.280 --> 0:10:50.680 terms of their earnings and revenues. 0:10:51.600 --> 0:10:55.560 Yeah, I think you know, certainly autonomous vehicles you hear 0:10:55.559 --> 0:10:58.600 about particularly around synthetic data, so that's being able to 0:10:58.640 --> 0:11:02.320 take for instance, real world miles and then model them 0:11:02.320 --> 0:11:07.800 out into other situations that you couldn't possibly capture in testing, 0:11:08.200 --> 0:11:11.520 people driving around and accidents that could come up, just 0:11:11.520 --> 0:11:14.360 as an example. So that obviously benefits we think the 0:11:14.440 --> 0:11:17.079 riot hailing names, and there's going to be others. 0:11:17.080 --> 0:11:17.480 You mentioned. 0:11:17.559 --> 0:11:21.320 Digital ads is kind of one of the best sectors 0:11:21.360 --> 0:11:24.800 where you can apply AI. Web design is another sector 0:11:24.880 --> 0:11:27.239 we've mentioned, So that's companies like Wix and GoDaddy. 0:11:27.880 --> 0:11:30.439 Those companies are making it easier than ever to. 0:11:30.400 --> 0:11:32.800 Go out and start a small business, build a website, 0:11:33.120 --> 0:11:34.240 and grow off of that. 0:11:34.400 --> 0:11:36.040 So those are some of the ones in our coverage. 0:11:36.360 --> 0:11:40.600 We like, Brad, we had some big tariff news coming 0:11:40.600 --> 0:11:44.520 out of Washington today. How does that weigh into how 0:11:44.559 --> 0:11:47.560 you're looking at tech names going forward, especially given all 0:11:47.559 --> 0:11:51.840 this talk about AI infrastructure, which will require perhaps some 0:11:51.880 --> 0:11:53.400 of these critical materials. 0:11:54.800 --> 0:11:56.840 Yeah, I mean, I think we'll reserve judgment on what 0:11:56.920 --> 0:11:59.680 the ultimate outcomes of those are given what we've seen 0:11:59.679 --> 0:12:03.920 over the past a few weeks, but I think the 0:12:04.240 --> 0:12:08.520 the impact would align with what the macro impact would be, 0:12:08.559 --> 0:12:11.280 which is if you raise costs, certainly that's probably not 0:12:11.320 --> 0:12:13.720 going to be a good thing for these companies. That 0:12:13.760 --> 0:12:16.920 are building out, certainly Meta, Amazon and Google being the 0:12:17.000 --> 0:12:20.560 three kind of you know, biggest brick layers in this industry. 0:12:21.559 --> 0:12:24.319 I'll be see Capital Markets Internet analyst Brad Erickson. 0:12:24.440 --> 0:12:26.920 Great to get some time with you. Thanks coming up. 0:12:27.480 --> 0:12:31.040 Those may have found irregularities and the Treasury Department that's 0:12:31.040 --> 0:12:32.120 acording to President Trump. 0:12:32.360 --> 0:12:32.720 More on that. 0:12:32.800 --> 0:12:34.199 Next is blue meg technology. 0:12:46.520 --> 0:12:47.480 There could be a problem. 0:12:47.520 --> 0:12:51.000 You've been reading about that with treasuries, and that could 0:12:51.000 --> 0:12:54.160 be an interesting problem because it could be that a 0:12:54.200 --> 0:12:57.120 lot of those things don't count with other words, but 0:12:57.280 --> 0:13:01.800 some of that stuff that we're finding is very fraudulent. Therefore, 0:13:01.880 --> 0:13:03.800 maybe we have less debt than we thought of. 0:13:03.960 --> 0:13:06.160 Think of that. 0:13:06.160 --> 0:13:08.839 That was President Trump speaking an Air Force One ahead 0:13:08.840 --> 0:13:12.400 of yesterday's Super Bowl attendant saying Elon Musk's doze may 0:13:12.400 --> 0:13:16.640 have found irregularities at the Treasury Department. For more, Bloomberg's 0:13:16.640 --> 0:13:19.160 Mike Shepherd joins us. Now, Mike, what do we know 0:13:19.400 --> 0:13:22.840 about what exactly Trump was referring to and what the 0:13:22.840 --> 0:13:25.400 potential implications could be on the treasury market. 0:13:26.679 --> 0:13:29.280 Well, this is one of the great mysteries that emerged 0:13:29.360 --> 0:13:34.040 from that Air Force One conversation with reporters. He raised 0:13:34.040 --> 0:13:38.200 the prospect of irregularity somewhere in the Treasury Department, but 0:13:38.360 --> 0:13:42.880 offered no specifics, nor have we heard from the cost 0:13:42.920 --> 0:13:47.720 cutting team over at Treasury now that's being led by DOZE, 0:13:48.240 --> 0:13:52.920 by executives from this US digital service that DOZE. 0:13:52.679 --> 0:13:53.360 Is working with. 0:13:53.600 --> 0:13:56.320 We don't know what they're referring to as a government contracts. 0:13:56.440 --> 0:13:59.720 Is it excessive spending within the Treasury Department on certain 0:13:59.760 --> 0:14:03.760 cons and we don't know even whether it refers to 0:14:03.960 --> 0:14:08.880 the Treasury's market itself the way the President was discussing 0:14:09.000 --> 0:14:11.560 in that moment. We do know that Scott Bessant, the 0:14:11.960 --> 0:14:15.280 Treasury Secretary, sought during his interview with our colleague Salaiah 0:14:15.320 --> 0:14:20.120 mosen to are for reassurances that everything would be normal 0:14:20.240 --> 0:14:25.000 operationally at Treasury despite whatever Doge might be doing. 0:14:25.640 --> 0:14:28.960 And how much Doge can do when well judge his 0:14:29.040 --> 0:14:31.280 way in and try and halt some of the activity 0:14:31.400 --> 0:14:34.720 is a question mark, Mike, so too, is well laying 0:14:34.800 --> 0:14:36.640 back some of the operations. 0:14:36.120 --> 0:14:36.680 Of other units. 0:14:36.680 --> 0:14:39.120 I'm thinking about the Consumer Financial Protection Bureau seems to 0:14:39.160 --> 0:14:40.520 me now skeletal too. 0:14:41.520 --> 0:14:43.720 Well, that's right, Karen, that is one of the latest 0:14:43.720 --> 0:14:48.440 targets of this cost cutting initiative sweeping through the government. 0:14:49.080 --> 0:14:52.640 DOGE is going really agency by agency, and the Consumer 0:14:52.720 --> 0:14:58.320 Financial Protection Bureau was the latest target over the weekend. Essentially, 0:14:58.360 --> 0:15:01.560 they have shuddered operation. Employees have been told not to 0:15:01.600 --> 0:15:02.720 come into the office. 0:15:02.840 --> 0:15:03.920 And of course this does. 0:15:03.800 --> 0:15:08.400 Coincide with Elon Musk's own efforts to turn x into 0:15:08.720 --> 0:15:13.360 a one platform for all different types of services, not 0:15:13.640 --> 0:15:17.520 just social media and communication, but also turn into a 0:15:17.600 --> 0:15:20.360 place where you could do transactions financially. 0:15:20.680 --> 0:15:22.440 Now, the Doze. 0:15:22.720 --> 0:15:26.440 Team over at CFPP has gotten access to some sensitive 0:15:26.520 --> 0:15:31.040 data our reporting has shown, including bank examination records and 0:15:31.160 --> 0:15:37.160 other information that is closely guarded that's very sensitive. Of course, 0:15:37.280 --> 0:15:42.080 the Consumer Financial Protection Fewer does scrutinize banks and other 0:15:42.600 --> 0:15:46.200 financial services companies for the way that they interact and 0:15:46.360 --> 0:15:50.400 intersect with consumers. And this agency exists, as its name 0:15:50.440 --> 0:15:53.520 would suggest, to protect consumers. You know, there are other 0:15:53.560 --> 0:15:55.920 financial regulators, but this is the one that is really 0:15:56.000 --> 0:15:59.360 geared to look out for the average American and it 0:15:59.440 --> 0:16:03.840 is returned since its inception in twenty eleven, roughly twenty 0:16:03.880 --> 0:16:08.520 one billion dollars in improper payments or improper charges back 0:16:08.560 --> 0:16:12.600 to consumers from these institutions. 0:16:12.320 --> 0:16:14.560 Megs, Mike Shepard, thanks for all of that. 0:16:14.840 --> 0:16:17.560 Meanwhile, Doge gaining a key ally we understand at the 0:16:17.640 --> 0:16:21.240 US Treasury with veteran tech employee Tom Krause, who has 0:16:21.280 --> 0:16:23.760 been appointed a special Government employee and will serve as 0:16:23.800 --> 0:16:26.920 Fiscal Assistant Secretary at the Treasury. But he's also the 0:16:26.960 --> 0:16:30.920 CEO of Cloud Software Group, which saw deep cost cuts 0:16:30.960 --> 0:16:32.120 at Citric Systems. 0:16:32.360 --> 0:16:33.960 For Marburne, Megs, Jordan and Robertson. 0:16:34.280 --> 0:16:36.880 And it is such a deep dive that you do 0:16:36.920 --> 0:16:39.520 with colleagues here, Jordan, just talk us through who Tom 0:16:39.600 --> 0:16:41.920 Krause is and why we're worried about the deep cuts 0:16:41.920 --> 0:16:43.000 he's done in the private sector. 0:16:44.400 --> 0:16:45.280 Yeah, thanks for having me. 0:16:45.400 --> 0:16:48.280 So we're learning more information about Tom Krause, you know, 0:16:48.400 --> 0:16:52.320 the Doge pick Elon Musk's Doge pick at Treasury. As 0:16:52.400 --> 0:16:55.560 you mentioned, he currently holds two jobs, one at Treasury 0:16:55.600 --> 0:16:59.200 and one as CEO of Cloud Software Group. Cloud Software 0:16:59.240 --> 0:17:03.040 Group was formerly known as Citric Systems. That company got 0:17:03.040 --> 0:17:06.359 acquired for sixteen point five billion dollars in a private 0:17:06.359 --> 0:17:09.400 equity leveraged buyout in twenty twenty two. And what we've 0:17:09.400 --> 0:17:12.280 done is we've taken a look at a series of 0:17:12.320 --> 0:17:16.959 pretty significant cost cuts that Kraus enacted at Cloud Software 0:17:17.000 --> 0:17:18.840 Group over the last two two and a half years, 0:17:19.000 --> 0:17:21.959 and in particular the impact of those cuts on the 0:17:22.000 --> 0:17:26.000 security of Citrix products. There's a family of Citrix products 0:17:26.000 --> 0:17:29.080 called NetScaler. These are security appliances that have been at 0:17:29.080 --> 0:17:32.560 the center of a number of major hacks in recent years. 0:17:32.800 --> 0:17:35.480 And what we looked at was to try to quantify 0:17:35.640 --> 0:17:37.760 the level and the extent of the cuts to the 0:17:37.760 --> 0:17:42.440 security department at Citrix and any impact to the security 0:17:42.520 --> 0:17:45.320 of those appliances. And what we found was that the 0:17:45.320 --> 0:17:48.600 cuts were very deep, indeed across the company, including the 0:17:48.600 --> 0:17:51.919 security department, and that this in fact may be why 0:17:52.280 --> 0:17:55.600 Kraus was selected by Musk's doge. 0:17:55.080 --> 0:17:57.120 As for this Treasury role. 0:17:57.240 --> 0:18:00.199 His background is cost cutting, His background is all so 0:18:00.280 --> 0:18:04.480 according to the sources we've spoken with, running incredibly profitable companies, 0:18:04.600 --> 0:18:06.040 you know, this is his specialty. 0:18:07.320 --> 0:18:12.320 Jordan, your reporting raises an important question about employing private 0:18:12.320 --> 0:18:15.560 equity tactics, this cost cutting that you're talking about in 0:18:15.680 --> 0:18:18.560 sensitive sectors. So now kind of take that into the 0:18:18.560 --> 0:18:23.040 government in Washington, where cross now has more influence. What 0:18:23.200 --> 0:18:27.080 has the agency said the Treasury Department as well as 0:18:27.119 --> 0:18:29.520 maybe even the company he's still employed by, which I 0:18:29.640 --> 0:18:30.720 found super surprising. 0:18:32.040 --> 0:18:34.640 Yeah, the Treasury Department says things are you know, operating 0:18:34.680 --> 0:18:37.560 normally while the DOGE team kind of conducts its work, 0:18:38.000 --> 0:18:40.720 you know, over the weekend, Krouse, you know, and other 0:18:40.840 --> 0:18:45.840 DOGE staffers were you know temporarily stopped from accessing data 0:18:46.040 --> 0:18:46.960 and using the data. 0:18:47.560 --> 0:18:47.720 You know. 0:18:47.800 --> 0:18:48.920 However, you know, what. 0:18:48.840 --> 0:18:52.119 The reporting finds is that, you know, this is a strategy, 0:18:52.160 --> 0:18:55.800 a very time honored strategy among private equity companies to 0:18:56.040 --> 0:18:57.960 you know, kind of load up companies with debt, buy 0:18:58.000 --> 0:19:00.600 them with lots of debt. You have to then cut 0:19:00.640 --> 0:19:03.760 lots of costs in order to repay that debt. And 0:19:03.880 --> 0:19:05.879 you know, in terms of the potential impact in the 0:19:05.880 --> 0:19:08.159 federal government, it really depends who you talk to. You know, 0:19:08.200 --> 0:19:10.600 we've spoken to folks and we've included their commentary in 0:19:10.640 --> 0:19:13.400 our story. You know that think that ultimately cross could 0:19:13.400 --> 0:19:15.680 be really a positive thing for the government in terms 0:19:15.760 --> 0:19:19.280 of you know, really aggressively slashing expenses and finding ways 0:19:19.320 --> 0:19:22.280 to be more efficient. We've also spoken to other you know, 0:19:22.359 --> 0:19:26.760 industry experts, security experts, government experts who say that applying 0:19:26.760 --> 0:19:30.120 a private equity approach to government, you know, could potentially 0:19:30.160 --> 0:19:33.959 have very very serious and very unexpected consequences, especially when 0:19:33.960 --> 0:19:37.080 you're talking about cutting not just thousands of employees that 0:19:37.119 --> 0:19:40.719 were cut at Citrix, but potentially tens of thousands, hundreds 0:19:40.720 --> 0:19:41.960 of thousands or more. 0:19:42.520 --> 0:19:55.360 That's Bloomberg, Jordan Robinson, thanks for joining us Tesla Challenger. 0:19:55.400 --> 0:19:59.080 BYD plans to integrate software from deep Seek and is 0:19:59.119 --> 0:20:03.000 also offering you driver assistance features in almost all future 0:20:03.040 --> 0:20:06.520 models at no additional cost to buyers. Let's bring in 0:20:06.520 --> 0:20:07.560 Bloomberg's Craig. 0:20:07.440 --> 0:20:08.320 Triudell for more. 0:20:08.640 --> 0:20:10.840 Craig, before we get into some of these new features, 0:20:11.240 --> 0:20:14.120 what do we know about how by D is incorporating 0:20:14.119 --> 0:20:15.680 this new Deep Seek technology. 0:20:17.119 --> 0:20:19.840 Yeah, it's still a little bit unclear how exactly this 0:20:19.960 --> 0:20:23.480 is going to work, but there is some support here. 0:20:23.480 --> 0:20:26.879 And I think the combination of two names that you know, 0:20:26.920 --> 0:20:28.800 it's hard to kind of think of of two that 0:20:28.840 --> 0:20:32.160 are any bigger in the tech and auto spaces. I mean, 0:20:32.560 --> 0:20:35.000 a deep Seek very much as sort of come lately name, 0:20:35.520 --> 0:20:37.800 whereas by D I feel like has been you know, 0:20:37.880 --> 0:20:39.960 the last few years, just the sort of talk of 0:20:39.960 --> 0:20:42.879 the auto industry in terms of how quickly they've grown 0:20:43.119 --> 0:20:46.400 and and you know just how big of ambitions they have, 0:20:46.960 --> 0:20:49.120 and you know, the one knock that they've they've maybe 0:20:49.119 --> 0:20:52.000 had against them is they don't necessarily bring a ton 0:20:52.200 --> 0:20:56.000 of you know, driver assistance technology to the table. They're 0:20:56.000 --> 0:20:58.159 trying to address that and also do so in a 0:20:58.160 --> 0:21:00.760 way that you know, is very sort of consistent with 0:21:00.760 --> 0:21:03.480 what their approach has been just to the industry in general, 0:21:03.560 --> 0:21:06.200 which is you know, really aggressive pricing. 0:21:06.240 --> 0:21:08.840 Really aggressive rampop in it shares. Recently, we're just showing 0:21:08.880 --> 0:21:10.840